Sensex and Nifty begin trading today for the first time in this holiday-shortened week. S&P BSE Sensex is at 44,149 points while the 50-stock Nifty is at 12,968. Technical analysts expect the Nifty 50 to move range bound in the coming sessions. “The study of long term charts like weekly and monthly time-frames signal crucial overhead resistance for the market around 13100-13150 levels. The lower area of 12850-12750 is going to be an important base for the Nifty and a decisive move below this area could open a sharp downward correction in the market,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Stock markets, this week, will move after digesting the GDP figures that confirm that India is technically in a recession and also await RBI’s Monetary Policy Committee (MPC) which begins tomorrow. Analysts also expect the flood of funds that came with heavy FPI buying last month to reduce in the coming sessions.
Global cues: On Monday, indices on The Wall Street closed in the red. Dow Jones slipped 0.91% while S&P 500 dropped 0.46%. NASDAQ too closed with a negative bias. On Tuesday morning Asian peers were in jubilant mood with Shanghai Composite trading in the green along with Hang Seng. TOPIX and Nikkei 225 were also surging higher. South Korean markets were mixed as KOSPI zoomed and KOSDAQ traded with losses.
Support and Resistance levels: On the charts, for the next few trading sessions, 12810 should be the sacrosanct level for the trend following traders, according to Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities. “If it sustains above the same then uptrend texture is likely to continue up to 13050. And any further upside could lift the index up to 13200 levels. On the flip side, dismissal of 12810 could trigger correction up to 12700-12650 levels,” he added.
Call and Put OI data: For the December series, Call and Put option data is currently scattered at different strikes. Maximum Call Open Interest (OI) is placed at 13,000 strike with 27.12 lakh contracts. Maximum Put OI is at 12,000 strike with 27.79 lakh contracts.
FII and DII activity: Foreign Institutional Investors (FII) pumped in Rs 60,358 crore into domestic equities last month. This was helped by the MSCI rejig, improving macroeconomic data, and a growing appetite for riskier assets. However, is will be interesting to see if FIIs continue to push in large sums of money aggressively, in the coming sessions.
GDP shrinks again: India’s July-September quarter GDP came in at -7.5%, against most expectations that expected a much steeper fall. With this the economy has shrunk for two consecutive quarters. While the Agriculture sector remained the bright spot, Manufacturing was another positive surprise. From the next quarter the figures are expected to improve further.